For the month of December 2022, India’s merchandise exports were 12.2% lower at $34.48 billion amidst weak global demand as a global slowdown impacted global markets. There was also the base effect at work here. Imports for the month were also lower by 3.46% yoy at $58.24 billion, thanks to a sharp fall in commodity prices. The trade deficit widened to $23.76 billion in December. There has been support from lower gold imports and cheaper oil, even as some import reduction did happen via import substitution.
Indian stock markets will fully shift to the T+1 settlement cycle from 27th January. Thus buyers can get shares and sellers can get fund on the next day of trade itself. This is a sharp improvement from the current T+2 system, which was introduced nearly 20 years ago. The shorter settlement cycle gives more rolling of funds. There were no teething problems since F&O has always been on T+1 settlement. In the last batch, all F&O stocks will be transitioned in one batch. The entire transition process took over a year.
Byju’s has taken a decision to not send its sales executives to potential customer homes to pitch courses. This avoids mis-selling due to aggressive sales strategies. Byju’s will entirely shift to remote selling which will be centralised with tech-driven audit process. Byju’s also plans to introduce multiple checks to verify intent and consent of customers to purchase. Byju’s has been asked to make necessary changes to their sales tactics to avoid mis-selling and they are also undertaking this exercise to avoid major controversies.
Siemens India signed a Rs26,000 crore contract to manufacture 1,200 electric freight locomotives of 9,000 HP power for the Indian Railways. The freight locomotives will be delivered over an 11-year period. This is the single biggest order for Siemens India from the Indian Railways. The contract will include 35 years of full-service maintenance. Maintenance will be done at Indian Railway depots in Visakhapatnam, Raipur, Kharagpur and Pune. These can transport freight of up to 4,500 tons at a maximum speed of 120 km/hour.
The India producer inflation or WPI inflation for December 2022 has come in sharply lower at 4.95%, nearly 65 bps lower than the Reuters consensus forecast. This is 90 bps lower than the 5.85% recorded in November. While the food index rose 0.65% in December, WPI of manufactured products eased to 3.37% in December 2022 from 10.71% in November. The low manufacturing inflation can be largely attributed to weak commodity prices. December 2022 WPI inflation recorded the lowest level since February 2021.
ShareChat, a short video-sharing platform in India that is backed by Google and Temasek, has decided to let go 20% of its staff. Like most start-ups, ShareChat has also been up against a funding winter and is under pressure to cut costs drastically. Despite the funding crunch, Indian start-ups had raised $24 billion in 2022. Most PE funds are now becoming sceptical about stiff valuations. For now it is time to prioritize and commit funds to high priority projects. ShareChat is valued at $5 billion and employs 2,200 people.
RBI tweaked norms for acquisition of shares in banks to ensure the ultimate ownership and control remain well diversified. Also, the major shareholders must be fit and proper on a continuous basis. RBI has asked banks to put in place a mechanism to track significant beneficial owner or acquisition up to 10% of paid up capital. In case of promoter, the limit has set at 26% of paid-up capital after 15 years. These rules will additionally apply to Local Area Banks (LAB), Small Finance Banks (SFB) and Payments Banks (PBs) in India.
With the Union Budget slated on the first day of February, the government decided to make some changes in the data calendar for February. GDP numbers will only be released after Budget 2023 announcement. The second estimate of GDP will be released on 28th February. While a formal announcement on this is awaited, the other data points like core sector data as well as the monthly IIP and inflation numbers will go ahead as scheduled. There is also a rather long budget session in two phases for the budget discussion.